Mortgage Rates Hit Highest Point in Months
Mortgage rates hit their highest point since summer this week, clocking in at an average 3.01% on 30-year, fixed-rate loans.
“Mortgage rates rose across all loan types this week as the 10-year U.S. Treasury yield reached its highest point since June,” said Sam Khater, Freddie Mac’s chief economist. “Many factors led to this increase, including the Federal Reserve communicating that it will taper its support of the capital markets, the broadening of inflation, and emerging energy supply shortages which compound other labor and materials shortages.”
As a result of the increase, overall mortgage applications fell this week, according to the Mortgage Bankers Association. Both purchase loan and refinance activity dipped 1% each. Purchase loan applications were 12% lower than a year prior.
“The increase in rates — mostly later in the week — led to a decrease in both purchase and refinance applications, with a prominent decline in government loan applications,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Conventional loan applications increased, driven by a rise in conventional refinances. This was perhaps a sign that some borrowers reacted to higher rates and decided to refinance.”
Refinances accounted for 66.4% of all mortgage activity this week, a slight increase over last week.
More in mortgage & housing news
- The Federal Housing Finance Agency released its monthly House Price Index this week, and it seems home prices are still skyrocketing. According to the index, national home prices are up 19.7% compared to July 2021. It’s the highest annual growth rate ever recorded.
- A new Senate bill was introduced that aims to create a 20-year, fixed-rate mortgage program designed just for first-time, first-generation homebuyers. It’s called the Low Income First-time Homebuyer Act (LIFT) and is sponsored by senators from Virginia, Maryland, and Georgia.
- According to a new report from Redfin, about 30% of homebuyers are looking to move to a new metro area. While that’s down from the 32% peek seen earlier this year, it’s still up noticeably from pre-pandemic years, when just 25% of homebuyers were migrating outward.
This week in mortgage rates
Mortgage rates rose on all loan products this week, with the biggest increases on 30-year and 15-year loans.
Here’s how rates looked for each loan type:
- Conforming 30-year, fixed-rate loans: 3.01% (up from 2.%)88
- 15-year, fixed-rate loans: 2.28% (up from 2.15%)
- 5/1 adjustable-rate loans: 2.48% (up from 2.43%)
Make sure to check back here next week for the latest mortgage rates and news.
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